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Category: AR/VR

KGI Securities analyst Ming-Chi Kuo has issued a new research report encouraging investors to keep their eyes on three products for 2018: the rumored 6.1-inch LCD iPhone, AirPods, and a "more affordable MacBook Air." The first two in that list have been widely discussed in recent weeks and months, but this is the first we've heard about an update to the MacBook Air.

We expect Apple (US) to roll out the new MacBook Air with a lower price tag in 2Q18. We forecast total shipments of MacBook models will grow 10-15% YoY in 2018 (vs. 0-5% YoY decline for the NB industry), up from 15.5-16mn units in 2017. While Quanta, Radiant, Catcher and SZS are likely to benefit from strong shipments momentum, SZS also stands to benefit from increased market share and a higher ASP.

Kuo doesn't offer any details on what to expect in an updated MacBook Air beyond a lower price tag, but the current models are certainly outdated as they haven't had any substantial updates in three years. Since that time, Apple has cut back on available models including a complete discontinuation of the 11-inch model. The only recent upgrade to the 13-inch model has been a bump to the base processor option last June, but it's still a Broadwell chip from the 2014–15 timeframe.

Aside from obvious internal upgrades like processors and graphics, another area that could see improvement is the display, as the MacBook Air currently offers a 1440 x 900 non-Retina display. We'll likely also see some USB-C/Thunderbolt 3 upgrades and perhaps an overall redesign given the age of the current design.

Kuo's claim of a second-quarter introduction points to the April–June timeframe, which could mean an announcement at WWDC in June, and we'll likely hear more rumors as the time gets closer.

In a separate report, Kuo predicts that AirPods and the rumored high-end over-ear headphones are the future of Apple's artificial intelligence and augmented reality ambitions. Kuo believes that compared to HomePod, Apple's headphones offer more opportunities for reaching users quickly, personalization, and complementing rumored augmented reality glasses. Kuo is extremely optimistic about AirPods demand going forward, but less enthusiastic about HomePod given "mediocre" demand so far.

Apple supplier Foxconn could be about to land a large number of additional MacBook orders this year, according to upstream supply chain sources (via DigiTimes). The increase could come at the expense of Quanta Computer, which has been Apple's major MacBook manufacturer in recent years.

Taiwan-based Foxconn has reportedly been working to boost its chances of notebook orders from Apple by offering attractive quotes, while Apple has not majorly upgraded its MacBook range since 2016's Touch Bar MacBook Pros, and is said to have no plan for one in 2018. Apple will therefore switch MacBook orders to Foxconn for models that are already in mass production as a way to save costs and reduce risks, according to the sources.

Foxconn is expected to begin mass shipments to fulfill the new orders in the second quarter of 2018, said the sources. Foxconn and Quanta both declined to comment on their clients or orders. The sources pointed out that Apple started outsourcing the assembly for some of MacBooks' components to Foxconn's plants in Shenzhen, China in the second half of 2017.

Despite the news, Quanta is expected to remain Apple's biggest supplier going into 2018. According to DigiTimes' research, out of 15 million MacBooks shipped to Apple a year, the shipment ratio between Quanta and Foxconn has been at around 8:2 for the past five years. Last year alone, Quanta had a 79.5 percent share and Foxconn took 20.5 percent.

Quanta is said to be looking to other brand vendors to offset the impact of the loss of orders, as it aims for similar growth to the market average in 2018. The Taiwan-based firm shipped 38.7 million notebooks last year, up 5 percent on year, and is currently the largest notebook supplier for Hewlett-Packard (HP), Apple, Acer and Asustek Computer.

Quanta also maintains orders from Apple for Apple Watch, and is said to be teaming up with Israeli-based augmented reality company Lumus to manufacture lenses for smart glasses. It's not clear if Quanta and Lumus are working with Apple on a future AR headset or smart glasses, but it is a possibility as rumors suggest Apple has a wearable augmented reality product in the works.

Apple representatives met with suppliers who make the type of parts required to power augmented reality glasses at CES this week, according to Bloomberg News.

During CES, representatives from major players like Apple, Facebook, and Google met with suppliers that make the nuts and bolts required to power AR glasses, according to people familiar with the meetings.

The report doesn't provide any additional details about the meetings, or what was discussed, but it's yet more anecdotal evidence that so-called "Apple Glasses" may one day go from rumor to reality.

Bloomberg News has previously reported that Apple is working on an augmented reality headset that could launch by 2020. An early version is said to have a dedicated display, a built-in processor, and a custom operating system dubbed "rOS" for "reality operating system," but many prototypes are thought to exist.

The early November report said Apple hasn't finalized how users will control the headset and launch apps, but it is supposedly investigating touchscreens, Siri voice activation, and head gestures, likely among other ideas.

Engineers are prototyping a range of applications, from mapping and texting to more advanced features including virtual meeting rooms and 360-degree video playback. The company has discussed pairing the headset with its own version of the App Store, where users would be able to download content, just as they do with the iPhone, Watch, Apple TV and Mac.

At the time, Apple software engineers were said to be using HTC Vive headsets for internal testing purposes, while working on a device similar to an Oculus Gear VR headset that uses an iPhone's display and other hardware.

An augmented reality headset is one of several projects that a team of Apple software engineers are supposedly working on under the umbrella code name of "T288" at the company's offices in Cupertino and Sunnyvale. The same team reportedly worked on Apple's ARKit platform for iPhone and iPad.

Apple CEO Tim Cook, despite repeatedly expressing a profound interest in augmented reality, recently alluded to any headset being at least a few years away during an interview with The Independent.

Today I can tell you that the technology itself doesn't exist to do that in a quality way. We don't give a rats about being first, we want to be best in creating people's experiences. Something that you would see out in the market any time soon would not be something that any of us would be satisfied with.

Lumus designs displays for AR glasses and will use Quanta for manufacturing purposes. In an interview with Bloomberg, Lumus CEO Ari Grobman said Quanta, which led a $45 million investment in Lumus in 2016, will also be able to produce AR lenses for other tech companies.

The partnership will result in more affordable lenses for wearable augmented reality products, lowering the overall cost for future products. "Quanta has suggested that full AR headsets would be priced for less than the cost of a high-end cell phone. That's a big deal," Grobman told Bloomberg.

It's not clear if Quanta and Lumus are working with Apple on a future augmented reality headset or smart glasses, but it is a possibility as rumors suggest Apple has a wearable augmented reality product in the works.

The latest rumors indicate Apple is developing an AR headset with a dedicated display, a built-in processor, and a reality operating system called "rOS." Apple is still in the prototyping phase and is exploring different input methods like touch panels, voice activation, head gestures, and more, and it is exploring the types of applications where such a product could be used.

Apple has an aggressive timeline for its augmented reality headset and is aiming to finish development by 2019 ahead of a 2020 release, but there could be delays and changes to the product as work continues.

Apple recently purchased Vrvana, a company that developed an augmented reality headset called Totem, reports TechCrunch.

Two sources with knowledge of the deal confirmed the acquisition, but Apple declined to comment and did not provide its usual acquisition statement. TechCrunch says Apple did not deny the story, though, and several employees who were previously with Vrvana are now with Apple.

Apple is said to have paid $30 million for Vrvana, and the deal may have taken place this summer. Vrvana's website is still up and running, but social media accounts ceased updates in August.

Vrvana developed a sort of mixed reality headset called Totem, which was never released. It was designed to combine both augmented and virtual reality technologies in a single headset, merging full VR capabilities with pass-through cameras to enable screen-based augmented reality features.

Essentially, Totem used a set of cameras to project real world images into its built-in 1440p OLED display, a somewhat unique approach that set it apart from competing products like Microsoft's HoloLens, which uses a transparent display to combine virtual and augmented reality. With Totem's approach, much richer virtual experiences were available, as full VR objects could be combined with a real-world view.

The built-in cameras were used to track the device's position in space, and additional infrared cameras were used to detect a user's hands. Several media sites were able to check out the Totem last year, and it received largely positive reviews.

Totem's technology could be built into a future Apple device, as multiple rumors suggest Apple is working on some kind of augmented reality headset or smart glasses product.

Apple is said to be building an AR headset that features a dedicated display, a built-in processor, and a new "rOS" operating system. The company is aiming to finish work on its augmented reality headset by 2019, and a finished product could be ready to ship as soon as 2020, should the project progress on schedule.

While Apple has acquired other augmented reality companies like Metaio, Faceshift, Flyby Media, and SensoMotoric Instruments, this is the first dedicated AR/VR headset hardware company Apple has purchased, signaling a deep interest in developing some kind of AR/VR wearable device.

Taiwanese manufacturer Quanta Computer, a primary assembler of the Apple Watch, has revealed that it is working on an augmented reality product for an undisclosed company that some industry observers believe is Apple.

Google Glass Enterprise Edition

Quanta's vice chairman C.C. Leung suggested the device will be a "headset-like gadget with a fully transparent lens that allows users to see through and interact with the environment," according to Nikkei Asian Review.

"Currently, we see such a device available in the market no later than the year 2019," he told reporters after the company's earnings conference.

Leung noted that if an augmented reality device could carry a price tag lower than $1,000, it would likely become a hit in the market, although it is unlikely he has any knowledge of Apple's pricing plans if they even exist yet.

Quanta is the second Apple supplier to mention involvement with an augmented reality product after fellow Taiwanese company Catcher Technology said it has been tapped to supply parts for an undisclosed wearable device.

Bloomberg was among the first to report on Apple's work on an augmented reality headset. It said Apple aims to have the technology ready by 2019, and could ship a finished product as early as 2020, which is a slightly longer timeline.

The headset's custom operating system, based on iOS, is reportedly dubbed "rOS" for "reality operating system."

Apple hasn't finalized how users will control the headset and launch apps, but it is investigating touchscreens, Siri voice activation, and head gestures as it creates prototypes, the report said.

Apple CEO Tim Cook alluded to any headset being at least a few years away during a recent interview about augmented reality.

"Today I can tell you that the technology itself doesn't exist to do that in a quality way," Cook said. "We don't give a rats about being first, we want to be best in creating people's experiences. Something that you would see out in the market any time soon would not be something that any of us would be satisfied with."

Cook has repeatedly expressed a "profound interest" in augmented reality, which he favors over virtual reality. Apple's ARKit platform on iOS 11 enables developers to integrate augmented reality features into iPhone and iPad apps, potentially laying the foundation for what's to come.

Apple is ramping up development of an augmented reality headset that will have its own display and run on a new chip and operating system, according to well-connected Bloomberg reporter Mark Gurman.

A fanciful mockup of digital glasses via TechAcute

Apple aims to have technology ready for the headset by 2019, and could ship a product as early as 2020, the report claims. But the development timeline is said to be "very aggressive" and could still change.

The headset's custom operating system, based on iOS, is reportedly dubbed "rOS" for "reality operating system."

Just as tvOS powers the Apple TV, macOS runs on Macs and watchOS runs on Apple Watches, "rOS" will power Apple’s AR headset. Geoff Stahl, formerly a software manager for games and graphics at Apple, is one of the directors of the "rOS" software group.

Apple hasn't finalized how users will control the headset and launch apps, but it is investigating touchscreens, Siri voice activation, and head gestures as it creates prototypes, according to the report.

Engineers are prototyping a range of applications, from mapping and texting to more advanced features including virtual meeting rooms and 360-degree video playback. The company has discussed pairing the headset with its own version of the App Store, where users would be able to download content, just as they do with the iPhone, Watch, Apple TV and Mac.

Apple software engineers are said to be using HTC Vive headsets, while working on a device similar to an Oculus Gear VR headset that uses an iPhone's display and other hardware, both for internal testing purposes only.

An augmented reality headset is one of several hardware and software projects that a team of Apple software engineers are supposedly working on under the umbrella code name of "T288" in Cupertino and Sunnyvale.

The same team was behind ARKit, which provides developers with tools to create augmented reality apps for iPhones and iPads.

Gurman previously reported that Apple was considering a pair of smart glasses that would connect wirelessly to an iPhone, much like the Apple Watch, and display "images and other information" to the wearer.

The Financial Times has also reported about Apple experimenting with "several different kinds" of wearable augmented reality prototypes, as it tries to figure out the "most compelling application" for a headset.

"Today I can tell you that the technology itself doesn't exist to do that in a quality way," Cook said. "We don't give a rats about being first, we want to be best in creating people's experiences. Something that you would see out in the market any time soon would not be something that any of us would be satisfied with."

Catcher Technology, a Taiwanese company that manufacturers metal casings for Apple products like iPhones, iPads, and MacBooks, will make parts for an augmented reality product, according to Nikkei Asian Review.

"Based on what we have learned, [new AR products] need to look good and be light enough to wear ... that makes the casings for such device very complicated to manufacture and there are still a lot of challenges to overcome currently," Catcher Chairman Allen Horng told analysts and reporters in an earnings conference on Tuesday.

Horng would not disclose which company was behind the augmented reality product, but given the comments and Catcher's relationship with Apple, the report has reignited speculation about so-called Apple Glasses.

Apple is reportedly exploring digital glasses that would connect wirelessly to iPhones and "show images and other information in the wearer's field of vision." The company supposedly has prototyped "several different kinds" of wearable augmented reality products, but a launch is still far away.

Apple CEO Tim Cook, who has repeatedly expressed a "profound interest" in augmented reality, recently said "the technology itself doesn't exist" to make the glasses "in a quality way." He said there are "huge challenges" with "the display technology required, as well as putting enough stuff around your face."

Jeff Pu, an analyst at Taipei-based Yuanta Investment Consulting, believes Apple's glasses will go on sale as soon as the end of 2019. Earlier reports mentioned 2018 as a possible timeframe, but that sounds increasingly unlikely.

Today's report marks the second time Catcher Technology has surfaced in the Apple rumor mill this week. KGI Securities analyst Ming-Chi Kuo on Monday said the company will supply Apple with "more complex" metal frames for iPhones launching in 2018 for the purpose of improving cellular signal and data transmission.

With Apple focusing heavily on augmented reality in iOS 11 through ARKit, Apple CEO Tim Cook received several questions about AR during today's fourth quarter earnings call. He was, of course, questioned about augmented reality hardware, a question he dodged by explaining that Apple's all about the experience.

In terms of monetization of AR/VR, we focus first and foremost on customer experience. We're all about making sure the customer experience is great. We think if we get the experience right, revenue and profits will follow. We're very much focused on the experience right now.

On augmented reality in general, Cook said there are "fantastic" people at Apple who are working on incredible things, and that Apple is in a "unique position" to lead when it comes to augmented reality.

I view AR as profound. Not today, not the app you'll see on the App Store today, but what it will be, what it can be, I think it's profound, and I think Apple is in a really unique position to lead in this area.

Augmented reality "amplifies human performance instead of isolating humans," Cook explained. "It's a help for humanity, not an isolation kind of thing for humanity." He said the "very cool thing" about augmented reality apps is that they're "all over the place." There are more than 1,000 ARKit apps in the App Store now, across a wide range of categories like shopping, gaming, entertainment, and business.

"I see apps that make me want to go to K-12 again and repeat my schooling because it changes the game in the classroom," said Cook. "The real beauty is that [AR] is mainstream and, of course, Apple is the only company that could have brought this because it requires hardware/software integration." He went on to compare ARKit to the launch of the App Store in 2008 and its subsequent growth.

This is very much like in 2008 when we fired the gun in the App Store. That's what it feels like to me and I think it will just get bigger from here.

Though Cook focused heavily on software and Apple's existing augmented reality experiences during the call, rumors have suggested that Apple is exploring augmented reality hardware solutions that go beyond the iPhone, like a set of augmented reality smart glasses. Work on the smart glasses is said to be in the early stages, with many technical hurdles still to overcome, so a launch is not expected for quite some time.

Apple CEO Tim Cook recently sat down for a wide ranging interview with The Independent alongside several app developers where he discussed augmented reality in its current incarnation on the iPhone and provided a bit of insight into Apple's plans for future devices that could potentially take advantage of augmented reality, like smart glasses.

As is typical, Cook refused to comment on products Apple has in development, but when questioned about the topic, he said the technology to create a pair of augmented reality smart glasses "in a quality way" does not exist today.

"But today I can tell you the technology itself doesn't exist to do that in a quality way. The display technology required, as well as putting enough stuff around your face - there's huge challenges with that.

"The field of view, the quality of the display itself, it's not there yet."

Cook went on to say that Apple will only ship a product that's the best, reiterating that the company doesn't care about being first to new technology. "We want to be the best and give people a great experience," he said. "But now anything you would see on the market any time soon would not be something any of us would be satisfied with. Nor do I think the vast majority of people would be satisfied."

Recent information has suggested augmented reality smart glasses are at least a year away or longer, with Apple aiming to figure out the "most compelling application" for an AR headset.

Though the technology does not exist today in Cook's opinion, he did provide some hope for a future AR wearable from Apple. "Most technology challenges can be solved, but it's a matter of how long," he said.

The rest of Cook's interview, which can be read over at The Independent and is well worth checking out, focuses heavily on ARKit and augmented reality. As he has done many times in the past, Cook said AR is huge, will be used by everyone, and will take off much like the App Store or multi-touch functionality.